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About the FCC

I have probably averaged a blog a week over the years talking in some manner about the FCC. I thought today I’d discuss a few basic facts about the industry that might help a non-regulatory person understand how they operate.

The FCC’s mission statement is straightforward – the stated mission of the FCC is to ensure that the American people have available—at reasonable cost and without discrimination—rapid, efficient, nation- and worldwide communication services, whether by radio, television, wire, satellite, or cable.

The FCC is an independent agency, meaning it’s not under the direct control of either Congress or the White House. With that said, each new administration gets to select at least a few FCC commissioners, but can’t have more than three of the five commissioners from the same party as the president.

Since 2009 the FCC has been funded through regulatory fees it collects from various industry sources such as annual licenses on cable TV providers, long distance providers, or owners of spectrum. The budget for the year just started on October 1 is $322 million. Starting this year, none of the monies collected from spectrum auctions can count towards the FCC’s budget. The Ray Baum Act that authorized the FCC earlier this year is the first FCC reauthorization bill since 1990. The agency could theoretically operate indefinitely without reauthorization as long as it generates enough fees to cover its budget.

The FCC has a lot of flexibility in determining how it will regulate the various industry. Their authority is only limited by specific rules established by Congress, such as the Communications Act of 1934 that created the FCC or the Telecommunications Act of 1996. Congressional bills that change FCC regulations are somewhat rare, but Congress may pass a number of bills in any year that change some specific aspect of operating the agency. In this past year there were bills that did such things as change the reporting requirements by educational broadcast stations, eliminated some obsolete reports that were prepared for Congress, and established the office of Inspector General at the FCC.

The FCC can establish new rules for regulating the various industries as long as those rules don’t conflict with past Congressional mandate. Many of the challenges that are filed against new FCC decisions question if the FCC’s actions are in conflict with the authority granted to the agency by Congress. The extent and limitations of the FCC’s authority has been defined over the years by a series of court decisions.

The FCC’s rules are encapsulated into seven sections, called ‘Titles’. The FCC rules that govern the telecom industry are included in a few of the Titles:

Title II regulates Common Carriers that include telephone companies, CLECs, wireless providers and long-haul fiber networks. Some of the regulation in Title II must be coordinated with a Joint Board, that includes both FCC and state regulators.

The day-to-day functions of the FCC are carried out by 7 bureaus – the Consumer and Governmental Affairs Bureau, the Enforcement Bureau, the International Bureau, the Media Bureau, the Public Safety and Homeland Security Bureau, the Wireless Telecommunications Bureau and the Wireline Competition Bureau.

Most FCC rules are adopted using a process known as ‘notice and comment’ that are defined in Title I. The FCC will issue various forms of proposed rules and anybody in the public can comment.

The public is also free to file complaints to the FCC about actions by regulated companies that have harmed them. The FCC has a defined process for handling such complaints, and most are referred back to the offending regulated party with instructions to explain their actions of make amends if they acted incorrectly.

There is also a more formal process for regulated companies to make complaints against each other, or which seek resolution of industry disputes and the FCC has Administrative Judges that hear such complaints and make rulings or assess fines. Many of the ‘orders’ we see from the FCC, such as a whole series of rulings over the last few years about access charges, are actually rulings from Administrative Judges and not from the FCC Commissioners.

The FCC also has an Engineering and Technology bureau that advises the FCC on technical issues such as spectrum allocations. This group also authorizes the use of equipment, and most telecom equipment must be approved by the FCC before it can be introduced into the public networks. This group also can grant the use of experimental licenses to test new ideas in the field.